--:-- Brian Schimpf: So when I think about where AI is going to drive the most value for warfare, it is dealing with the scale problem, which is really the amount of information that is the number of sensors, the sheer volume of systems that are going to be fielded, and it's going to go through the roof. So this is like lattice. Maybe start even there. Everything has a sensor. That's right. Everything is communicating. So what do people do in the DoD? There's a lot of things they do, but what's the primary warfighting function? They are trying to find where the adversaries are. Yes. They need to then deploy effects against them. That can be a strike. That can be deterring them by a show of force. That can be jamming and non-kinetic things. And they've got to then assess, did that actually work, right? Find them. You got to engage. And you got to assess, right? It's like pretty straightforward. That is the primary thing that the military does. And so, okay, what do you need to do that? You need a ton of sensors. You need a ton of information on what is going on with an adversary who's constantly trying to hide from you and deceive you. Yeah. So just huge amounts of information to make that problem as intractable as possible for them to be able to hide. Or when they are deceiving, you can figure it out. It's hard to deceive in every single phenomenology of sensing. This technology exists, right? The sensors exist. The sensors exist. And the sensors are deployed, right? They're going to get better, and you're going to be cheaper, and you're going to be able to do more of them. But a lot of the limit of why can't we do more is what the hell are you going to do with the data? Processing capabilities? Yeah, like processing, but also just operationally. So, okay, now I say I had a perfect AI system that could tell me where every ship, aircraft, and soldier was in the world. What are you going to do with that? Now I know everything. That is overwhelming, right? And so then being able to sit through that information to, well, okay, they're maneuvering here. What does that imply? Is this an aggressive action? Is it outside their norms? Is this different than we've seen in the past? Being able to pull out that signal from just this overwhelming amount of information that exists. And then on the other side, you got to act, right? So now I've got to actually be able to carry out these missions. So this is where on the autonomy side, it really comes in, which is, okay, I want to send fighter pilots out. So the way they do like a Predator drone today is like a guy with a joystick. Yeah. We've all seen the Ukraine, Russia. Yep, exactly. It's all like manually piloted. But that doesn't really scale. And there presents a lot of limitations on communications jamming, all these things. So I want to be able to task a team of drones to go out and say, hey, go in this area and find any ships and tell me where they are. I just want it to be that simple. And they just need to figure out their own route. And if I lose some of them, they rebalance. They just go out and handle it. I'm running target recognition. They can pop back whatever's relevant. That is where I think the autonomy side really comes in, which is I can just drive scale into the number of systems I can operate in the environment. The promise of AI in a lot of ways in the long run with this is just the ability to scale the types of operations I'm doing, the amount of information I have. And if done very well, it will put humans into a place of sort of better decision-making, right? Instead of being like inundated by a volume of data and then all of our capacity goes to these mechanical tasks we can have humans with much better context much better understanding historical understanding of what this means what the implications of different choices are. Yeah. Those are all things that AI can enable over time. Ideally, better decision making. I think you can get wildly better decision making. We're working with both limited information and imperfect judgment. That's right. I guess, right? Yeah. And so the more you can have AI augmentation for these things and synthesis and like clarity, that is where the promise of this is. And so the US posture on this is very much We want to have humans accountable for what happens in war. Yes. That is how it should be, right? The military commander that employs a weapon is accountable for the impact of those weapons. Yeah. That is correct. I think that is the system we should have. And so then nobody is talking about having full-blown AI is going to decide who lives and die. That is a crazy version that nobody wants to have. Well, I think it's also far-fetched in the sense that it presumes some sort of objective function that isn't driven by us. This is my conversation with everybody when they're like, oh, my God, what about when the AI goes Terminator on us? And I'm like, it's a tool for humans. It doesn't have an objective function. That's a leap that is not on the scientific roadmap today. So why would that be the case in warfare? That's right. And so I think the reality for these things is it's going to be human augmentation. It is going to be enabling humans to operate at a much larger scale with much higher precision on these things. And that is the opportunity with it. Yeah. And so to me, it is unethical to not apply these technologies to these problems. And I think our view has always been, if we're the best technologists on these problems, or we can get the best technologists to it, giving the best tools on these absolutely critical decisions that are extremely material, that seems like probably a good thing. And engaging in the question of how can you use this technology responsibly and ethically is incredibly important. Yeah. Is it more humane to have a fighter pilot in the way of danger or having an autonomous system piloting in a conflict? That's right. And by the way, I have friends who are fighter pilots. I love fighter pilots. Yeah. But, you know, the technology has advanced significantly and you can make the argument that it is more humane not to put them in the line of fire. That's right. Yeah. We're not going to want to put U.S. troops at risk. Yes. And I think those are the deterrence factor of the U.S. saying, I have this capability and I've reduced my political cost of engaging on these things. It's actually a pretty good deterrent as well. Yeah. I'm not putting U.S. troops or I can give this to allies. Yes. And they can defend themselves. Yep. And so I keep us out of the fight. Exactly. Keep our troops out of the fight. Keep the troops out of the fight. And it changes the calculus quite a bit. And I think that actually, in a lot of ways, if done well, has a significant kind of stabilizing impact and deterrent impact. It just is harder to use force to get your political ends. Yes, exactly. And I think that can be a very positive thing. Yeah, exactly. Yeah, I keep coming back to deterrence. And we need to find a way to create a sense of urgency for the sake of deterrence, not for the sake of going to war. That's right. And so it feels like that's universally, like among people we talk to, I feel like that's universally known. And hopefully we can make some progress. Yeah. I think people largely agree. Look, Vladimir Putin was very convincing of this. Like, it turns out invading Ukraine was probably the single biggest shift I've seen in terms of people recognizing that, look, there are still bad actors in the world. They will use force to get to their political will if they think it will work. Yeah. If the cost is worth it, they're going to do it. And I don't think there's any reason to believe that's going to stop. It's been true for tens of thousands of years. Do you think the future of Warface, you said AI is an augmentation for humans. Yep. How fully automated do you think a conflict can become, say, in the next 10 years? Look, I think the mechanics of, okay, there's this airfield and you want to go surveil it and take it. You're going to do some strike. You're going to do some surveillance. You're going to do all these things. There will be a large degree of automation in that, right? Like I can just say, hey, send this team of drones out in these waves to go conduct this operation. Find things that pop up that are a threat. Tell me if you pop up to the human to say engage or not. It goes. Like it can move at a much faster pace. I think a lot of the things that were starting to happen in Ukraine, a lot of the great work Palantir did was on things like this, where it was like the targeting process of going from satellite imagery through to, hey, this looks like a tank, through to an approval of is this a legitimate military target or not. It was streamlined and compressed. Much faster work. Much, much faster. So I think those things will happen very, very quickly. Like very, very quickly. Then, okay, now it turns into a matter of policy and degree and scope. That is a thing that I think we're just going to have to figure out as we work through it with the military. So what we think about from the technology side is, okay, I don't want to design anything that precludes more advanced forms of this over time. Architect it correctly. But the crawl phase is just get a lot of the basics, just automate it. Very mechanical things. Make it very predictable. Don't have any surprises. And then you can add more sophistication as you build trust. The AI advances. These things get more sophisticated over time. And one of the best examples is on the defensive side where it's right for AI. So we do a lot of work on counter drone systems. This is one of the areas we're partnering with OpenAI on. And it's looking at this question of if you have multiple drones flying at you and you have minutes to respond before the strike happens on you. How do you make an optimal decision? How do you make an optimal decision? When you are panicked, you are nervous, and your life is at risk. It's very hard. Is that like a person manually sitting there making those decisions today? Yeah. It's often three because they have a separate radar from a camera or separate from the guy pulling the trigger on the weapon systems. Oh, man. And so then the coordination costs can be significant. So you can automate a lot of this. And I think the other problem with this is then, as we've seen in Ukraine, every single unit, every single soldier is now at risk of drones, right? Yes. So this has to proliferate out from being a specialty that you do in an operation center now to every vehicle. In the field. In the field, everyone has to have this capability. You need the ability to have these systems just process all that sensor data automatically, fuse it together, tell you viable options for countering this, tell you what's a threat and what's not a threat. Like these are the types of things you need to be able to do, respond with intelligent suggestions, and then have the system just automatically carry it out from there. Yeah. These are the types of problems we're working on. And the defensive side is just, you need it, right? There's no choice because the timelines are too short and the urgency is too high. And it's a very straightforward area to understand where technology can really improve the problem. Yeah, it's like the highest stakes version of decisioning that autonomous driving cars are doing today, but with way more sensor information. It's not a road, right? Yes, with an adversary who's constantly trying to fool you, deceive you. And yes, it's very, very hard. So that's one of the big parts of the partnership with OpenAI. Yeah, yeah. So they've been great. And I think Sam especially has been very clear that he supports our warfighters. And he cares about having the best minds in AI working on national security. And who better exists to work through these hard problems? Yeah. And so I was just incredibly proud of them for coming out in favor of this and saying they're going to work on this. They're going to do it responsibly. They're going to do it ethically. But this is an important problem that the best people should be working on. The defense industry is notoriously difficult for startups to navigate. So how did you guys actually get traction in the first place? And do you think that's going to change in the future? Do you think it will continue to be hard? Do you think the primes will continue to have a stranglehold? I'd love your take on that. It is very hard. And I think we built a lot of the right technology and the right business model. Of investing in things that we believe need to exist. I think we're picking a lot of the right problems to go after. But probably more than anything, I think we understood the nature of what it took to sell, right? And the congressional relationships, the Pentagon relationships, the military relationships, like all of this that you need to be able to say, hey, we have the right tech. You can trust us. We can scale. We can actually solve these problems for you, proving that it works, and then like catalyzing all of these really complex processes around it. I think the other part that we've done quite well is we're just finding ways to find those early adopters. And we understand those playbooks. Who's going to move quick? How do you just build that momentum and advocacy in the government to make this go? Look, it's like more bureaucratic in certain ways. Is it much worse than selling to a bank or an oil and gas company? I don't know, maybe 30% worse, but like probably not 5x worse. Yeah. And I think the reality is it's like enterprise sales are actually very hard. Yeah. Especially the ones with long sales cycles and massive commitments. That's right. These are large capital investments customers making. That is a slow sales cycle. That is how it works. And so I think there's like a lot of complaining and frustration. It's okay. Well also being bad at business means you bad at business If you don understand your customer you going to lose Yeah That how it works So do I think the government needs to be a better buyer of these things Do I think they need to like take better strategies that will get them more what they want Absolutely. They're taking observably bad strategies to get to the outcome they actually want. Do I think it's necessary to change for us to be successful? Not really. We're just going to play the game that they present. Okay. I want to talk about the observably bad strategies. Yeah. What are the observably bad strategies? And then what are the good ones? And maybe also wrap it into this idea that how do you actually convince the government that your ideas are the right ideas? So take, should you go spend money building a whole new generation of F-35s with manned pilots or a whole new generation of aircraft carriers? Or should you do something different? And how do you actually get your points across to them? Okay, so there's sort of like, how do they contract and buy? And what's been going wrong there? And then it's, what's the right composition of, even if you could buy perfectly well, what should you be buying? What should you buy? Yeah, two different questions. And so how are they buying poorly? So the typical government contracts are done in what's called cost plus fixed fee. And this actually came out of World War II when we were retooling industry to work on national security problems. We're just like, we're going to cover all your costs and we'll give you a fixed profit percentage on top. And so the incentives here are sort of obvious. If it's more expensive, you get more profit. If it is less reliable, you get more profit, right? The longer it takes, yeah. The longer it takes, the less reliable it is, the more complicated it is. There's no point of incentive in there to actually drive down costs. And you see this play out, right? It's like the companies have gotten so used to this where you look at even something like Starliner, where, you know, SpaceX had a third the amount of money that Boeing was given to make Starliner work. And SpaceX did it on time, probably faster than they even predicted. Did it probably incredibly profitably, and it worked. And so I think these incentives that don't hold you accountable are actually bad for your company. It just makes you a worse company. But do people in the government realize that it's bad for the country? I think they are frustrated. I think they understand that this is not really working. So you look at like F-35 as an example of one of these programs. It took 25 years to get it from initial concept to fielding. There's this awesome chart, which is like shows how long it takes to get commercial aircraft or autos from kickoff to fielding. And it's been like flat to slightly better for all of those things, like on the order of two to three years. The military aircraft side just went linearly straight up. Like these things are taking longer and longer and longer. And there's an amazing quote that if you extrapolate this out, this was in the 90s, this guy made this quote. If you extrapolate this out, by like 2046, the U.S. government will be able to afford one airplane that the Air Force and Navy share and the Marine Corps every other day of the week. That better be a good airplane. Yeah, these things are just crazy. And so I think they recognize that this is not working, right? This is broken. Now, the other part of this, they haven't had a lot of alternatives. So you have a relatively small cartel of these companies who sort of all say we won't do fixed price programs anymore. They won't do things on a fixed cost basis. So, okay, if you're the government and you're a buyer, what are you going to do? Yeah, of course. You don't have a lot of choice here. And there's been a lot of problems with trying to get this model right. Now, in terms of things that can work a lot better, I think SpaceX really proved this where they literally built a reusable rocket that you catch with chopsticks commercially. Like, that is, I think we can solve these things, guys. What thing can't we build? I think we can build an airplane. I think we can build it. So there's not really a question that this is the only part of some magical thing that can only, like, this is the only people that can do it anymore. And you guys with autonomous, I mean, you know. Yeah, like it's proven now that the technology can be built. Yeah, yeah, yeah. Yeah, exactly. And so I think the alternatives are there now. And then models that can work a lot better, it's like one of my crazier ideas is new missile takes about 12 years to go from concept through to fielding. Like 12 years. That's insane. It's insane. And so, okay, if you're in that world. But how fast is the technology evolving? Oh, like. This is like 12 years from now. Like, what we'll be able to do. Right, exactly. And then we'll still be on the previous system. There's even crazier examples like the Columbia-class nuclear submarine. It's going into service in 2035, and its expected lifetime is through 2085. So how good were we in 1960, I guess, where we were today? It's like, it's unclear, it's unclear. We had technology to go to the moon. Yeah, exactly. It was like the quality of the phone. It was like the computing power of the phone. And so these timelines just get longer and longer, and there's just this death spiral, these things. Contrast that cycle of development with China. Do they take 12 years? How is their tech stack up to ours? The single best stat for this is they're running hundreds of tests a year of hypersonic weapons. The U.S. is running like four. Right. Anyone who's worked in technology understands the compounding value of iterating on these things. And it is just so undervalued. Why is that the case? Look, the U.S., all these tests are very expensive, very complicated. There's so much buildup because every test has to go well because we do relatively few tests. So then it increases the risk and the duration that you prep for these tests and increase the cost. And you're just in this vicious negative cycle. Like anyone who's worked in like software understands this, like the old school way of releasing software. If you did a yearly release, try to shove everything you can into that. The risk goes through the roof. Quality is a disaster. Going fast has an insane quality of its own and just how quickly you can learn and how much you can actually reduce costs on these things. And so they're just much more willing to like test and iterate in a way that the U.S. is not right now. And so I think that is like long term, the biggest thing I worry about for the U.S. Just pace, the pace of innovation, pace of iteration on these things. It probably is the single biggest determining factor of how successful you're going to be over a 20 to 30 year period. How do we create a sense of urgency? Yeah, like you look at that retooling, we had a two year period of LendLease and the amount of GDP that was spent on LendLease. The time was through the roof. And we weren't at war then, right? Yeah, yeah, yeah. We were supplying other people. So we had a two-year head start to recondition U.S. industry around us before we even entered into a conflict. And that's about how long it took. Empirically, Russia, about the same duration, about two years to retool their industry against defense production. They are now outproducing all of NATO on munitions. Russia. Russia. Yeah. Russia. Oh, I believe it. And we've sanctioned them to hell, and they still are doing it, right? Well, they still have gas. They still have plenty of gas. And so it's quite tricky to think you're going to reconstitute this in a single day. I think the department has a lot of urgency on it. One of the areas where we see it is showing up with weapons. So when you look at these wargaming sort of scenarios, all these wargames are sort of questionable in their own ways. But pretty consistently, the stockpile of key U.S. munitions is exhausted in about eight days. It's hugely problematic. And that is because we have gone down this path of thinking that we'll be able to have this Gulf War strategy of concluding a conflict in two or three days, and that's how we're going to fight our wars. And it's just not true, right? It's like any of these high-intensity conflicts are protracted. Well, for any adversary that matters. That's right. It's not even close. We've got to be prepared to sustain these protracted conflicts. And that in and of itself is probably one of the best deterrent factors we could have. Exactly. It's like we will not stop. We will not back down. We will have the capacity to withstand anything, right? That is a message we need to send to our adversaries worldwide. We have critical gaps on a lot of the kind of constituent parts of supply chain. This is a national security issue. So I think there is a feeling that this is a problem. I don't think anyone thinks everything's going great. Now the question is, what are the strategies to get a way out, right? I don't think there's any debate that we're on our back foot in terms of the capacity we need, the mass we need, and the tight systems we need. Now, like, how do you get out of it? That's a much harder question. And do it in a way that is going to work with Congress, is affordable, is actually something we can sustain. The path we're on is probably more incremental than revolutionary, I would say, with like U.S. government, where companies like us are going to come in and win incremental new programs and show the different models. Yeah, so we'll be more innovative. We'll be more innovative. I think that flywheel is really starting to go. We saw a volume issue. But it is a major volume issue. And I think on the weapons production side, look, the only solve out of this is to actually tap into the commercial and industrial supply chains that exist. We're pretty good at building cars. We're pretty good at building electronics. Certainly the components that go into it. Components for sure. We're building a lot of components. We can do this stuff. And you can design your systems in a way that take advantage of those commercial supply chains. Like one example we have is maybe like a low cost cruise missile. It's very cool. Several hundred mile range. And we made the exterior fuselage in this process that's used for making acrylic bathtubs. It's this hot press process. It's like we're making the gas tank. This is a mad scientist thing. It's incredible. And it's like the fuel tank is maybe the same thing as the roto molding. You use it for like making plastic toys. And it works great. There a huge supply base that available to do these things. And in contrast with most of these traditional weapons where it like overly bespoke components we got to get the dude that knows how to solder this one thing out of retirement. And the supply chains are super deep, like four-year lead times on these weapons. It's really, really bad once you get into it. Like I saw this thing, the defense primes were like, we need to change the federal account acquisition rules so that we can stockpile four-year lead time parts. You're like, a four-year lead time part? What are we doing? What are we doing? What are we doing? The world has changed in four years. Yeah, like what good were we doing? And so I think there's a problem. But then the government doesn't help where they don't allow them to change the components. There's no incentive to change the components. Well, so this is the problem. There's no urge. Exactly. And so, look, I think a lot of the traditional players are like patriots and they really care. But it's like they're in a system that doesn't encourage them, support them, or even... I kind of boil it down to like two key things. One is meaningful redirection of resources. So like right now, the amount of money that's actually spent on capabilities like the types of things we're working on is somewhere between 0.1% and 0.2% of the defense budget. That seems pretty loud. Even if we got to 2%, 2%. Yeah. We are like in a wildly different world in terms of what you can do with that type of money. You're making like a VC sounding pitch. Yeah. If I could even get to look how big the market is, if I could just get to 1%. But that's actually very helpful context, all kidding aside. This is a crazy small number. It's a crazy small number. And even the small numbers are pretty big, but you really need to up this. So, like, number one is make the hard choices to drive redirection of resources and the technologies that are actually going to be what you need, right? Where they're so stuck with these legacy costs. Number two is every company in the world gets this, which is you need to empower good people to run hard at a problem and put all the things that they need to do it and all the approvals and all of that under their command to just get to yes. Yes, yes. It's very simple, right? That's how every company operates. And that is how you are successful. Just empower good leaders to get results and hold them accountable. It is the opposite of how it works in the Pentagon, where every time something has gone wrong, a new process and a new office has been added to check the homework and say no. And they stall progress out. And so I think there's relatively simple things that can be done with some combination of congressional action and executive action to flip that on its head, say, nope, these program offices are fully empowered to field their capabilities. And they're just accountable to senior leaders on the risk and trade-offs. And that's it. And you give them a budget. Give them a budget, give them a target. And they have to understand the risk. They have to do all this, but they're going to make informed choices on risk and cost and schedule and performance trade-offs. Yeah. Like, that's their job. That's what we're hiring them to do. And if we create really empowered people to actually field stuff, you will get amazing results. Because there are really good people in the government. It's just there are 10 times as many people who say no as there are to people who are accountable for doing. Oh, that's fascinating. 10 times more people who hang around and say no than say yes. That's right. Could you do just like a Project Warp Speed for defense? I know that's like, that implies something short term. Like, it's like
